Low Adoption in Mobile Money?

Three Ways to Fix It

Amitabh SaxenaManaging Director, Digital DisruptionsMaputo, Mozambique – June 27, 2018

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Since 2014, we’ve brought bring best-in-class methodologies, tools, and practices in product innovation to public and private sector clients in the Digital Financial Services (DFS) sector.

DFS CONSULTING CUSTOMIZED DFS RESEARCHPRODUCT INNOVATION TRAINING

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Agenda

Understanding Technology Adoption: Framework and Examples

Obstacles to Adoption, and How to Overcome Them

Q&A

A new microfinance institution (MFI) in Africa had begun issuing debit cards, and was keen on launching mobile banking.

So we decided to study debit card behavior to glean some initial insights.

The assumption was that those individuals who already felt comfortable with one form of digital financial services (debit

cards) would be more likely to use another (mobile banking).

Digital DisruptionsJune 2018

Similar to mobile money usage, the number of customers who actively use cards is considerably less than those who request them.

11,550 individual savers

2,174 debit cards requested & issued to branches

933 debit cards picked up at branches

467 debit cards used at least once the last 90 days

(1,243 debit cards remaining at branches)

3,200 are also loan customers

Digital DisruptionsJune 2018

We learned that the typical saver for the microfinance institution was a “female, just under 40, likely married, and an entrepreneur”, the typical innovator for a mobile banking service would likely be a

“single, young male, and more likely to be holding a steady job.”

This segmentation helped determine what the bank told each segment, and how it would do so

Typical product adoption follows an S-curve, with a “tipping” point at the onset.

Cumulative adoption

Relative adoption

Digital DisruptionsJune 2018

While the rate of adoption of new technologies has increased over the last few decades, mass-market adoption still requires at least 10-15 years.

Digital DisruptionsJune 2018

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Agenda

Understanding Technology Adoption: Framework and Examples

Obstacles to Adoption, and How to Overcome Them

Q&A

Three big issues causing low mobile money product adoption globally.

Laggards

(16%)

Late Majority

(34%)

Early Majority

(34%)

Early Adopters

(13.5%)

Innovators

(2.5%)

Young (<35), Urban, Literate Educated.

Middle-Aged (35-50), Some Secondary Education, Literate

Middle-Aged (35-50), Some Elementary Education, Basic Literacy

Time of Adoption

Rela

tive A

dop

tion

Product Diffusion of Mobile Money

Middle-Aged Senior (35-60), Little Elem Education, Basic Literacy

Senior (50-60), No Elementary Education, No Literacy

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unclear product design

not targeting “enthusiasts”

no targeted marketing or product development by segment

Mobile Money needs to “cross the chasm” to

gain mainstream acceptance

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Mobile money is fundamentally about behavior change, and thus having a clear, simple value proposition for a specific segment is essential.

The “Product-Market” Fit → Value Proposition

CUSTOMER PROFILEVALUE MAP

Digital DisruptionsJune 2018

A strong value proposition provides compelling benefits to the customer in addressing core gains and pains, ideally with a unique selling proposition.

While value propositions should be developed for multiple segments, it’s imperative to define and address the beachhead segment first.

Laggards

(16%)

Late Majority

(34%)

Early Majority

(34%)

Early Adopters

(13.5%)

Innovators

(2.5%)

Young (<35), Urban, Literate Educated.

Middle-Aged (35-50), Some Secondary Education, Literate

Middle-Aged (35-50), Some Elementary Education, Basic Literacy

Time of Adoption

Rela

tive A

dop

tion

Product Diffusion of Mobile Money

Middle-Aged Senior (35-60), Little Elem Education, Basic Literacy

Senior (50-60), No Elementary Education, No Literacy

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The mix of marketing activities needs to address the specific segment’s needs to help “push” the adoption along the curve.

Laggards

(16%)

Late Majority

(34%)

Early Majority

(34%)

Early Adopters

(13.5%)

Innovators

(2.5%)

Young, Educated, Literate, Urban

Middle-Aged (35-50), Some Secondary

Education, Literate, Urban Frequency

Middle-Aged (35-50), Some Elementary Education, Basic

Literacy, Mainly Rural

Time of Adoption

Rela

tive A

doption

Diffusion of Proposed Mobile Money Service

Middle-Aged and Senior (35-60), Little

or No Elementary Education, Basic or No Literacy, Rural

Senior (50-60), No Elementary

Education, No Literacy, Rural

Marketing Levers

Reference Programs

Personalized, pro-active “1:1

education programs

Purchase-Based Rewards

Mass Media “Education”

Threshold-Based Rewards

Promotional Hype

Merchant Discounts

Viral “Education”, human engagement

(See Late Majority)

Mobile Money needs to “cross

the chasm” to gain mainstream acceptance

Buyer behavior heavily influenced by Early Adopters

Customer Attributes

Digital DisruptionsJune 2016 - Confidential

Illustrative

Wizzit in South Africa is one DFS example which was not successful at crossing the chasm.

Digital DisruptionsJune 2016 - Confidential

* CGAP analysis (2006)

After an initial growth of approximately

250K users in 2007 (3 years after

launch), Wizzit was not able to

significantly grow its customer base

and move deeper down the pyramid.

Safaricom has had to continually offer enhancements on its mobile money service to address the particular needs of different adopter segments.

Laggards

(16%)

Late Majority

(34%)

Early Majority

(34%)

Early Adopters

(13.5%)

Innovators

(2.5%)

Rela

tive A

dop

tion

Diffusion of Safaricom Kenya’s M-Pesa with Key Service Enhancements (first 5 years)

Time of Adoption

off-network transfers

utility payments

ATM withdrawals

loan repayments

M-Kesho

Illustrative

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compelling product (big pain: money transfer) with unique selling prop (“send money home”)

beachhead segment: male, urban migrant laborers with family back home in the rural areas

strong marketing incentives as well as tailored products throughout the curve

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Safaricom’s M-Pesa’s early results showed that early adopters tried out their service.

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* M-Pesa had approximately 1.6 million registered users at time of research (Oct 2008)

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Agenda

Understanding Technology Adoption: Framework and Examples

Obstacles to Adoption, and How to Overcome Them

Q&A

Washington, DC // Kenya // South Africa // India

amitabh@digital-disruptions.com

+305-433-1060

About The Firm

Digital Disruptions is a global consulting and training firm in digital financial services, with an emphasis on strategy, marketing, and product innovation. It provides advisory services to financial institutions, mobile operators, payment networks, international organizations, technology vendors, governments, and start-ups involved in the intersection of technology and financial services.

Please see www.digital-disruptions.com to learn more how we can help.